Have you thought about how you can maximize your existing assets in retirement?

It’s important to us to avoid cookie-cutter solutions for our clients. We always consider our clients’ unique situations before recommending a course of action. 

Our clients knew that most of their net worth was tied up in illiquid real estate, but they were still looking for a potential solution to increase their cash flow. They expected to pass their real estate properties to their children, with the hope of increasing the tax basis upon their death. In order to supplement the couple’s desire to increase their cash flow in retirement, they had identified two options: sell the properties or take out a loan on the properties. Both options required them to yield part of their income in interest payments or taxes. 

Our primary goal was to find an alternative solution that would increase our clients’ cash flow while preserving capital over time. Coupled with an effort to ensure that their wishes for wealth transfer remained in place, we suggested a private reverse mortgage between generations, and, in exchange, their children received the appreciated real estate. We also suggested a life insurance policy to reimburse the second generation with an assured internal rate of return of 6%. 

Both parties agreed this was the best outcome, so we consulted an established and trusted attorney to further advice on the solution and draft the necessary documents. This third option provided the couple with liquidity while reducing potential middle-man costs. By thinking outside the box, we were able to present a solution that best fit the clients’ situation and preserve their legacy goals.



Disclosure: This plan was proposed to the client, but was not executed on due to the additional assests that were not included in the original financial plan.


Santa Barbara, CA

  • Client Goal

    Increase cash Flow

  • Years with Freestone

    5 years

  • actual

    Increased cash flow and protected their legacy goals for the next generation

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